Question

Paypal 1099K for personal used items - Report or not? And How?

Forum|Forum|5 years ago
February 24, 2021
1 reply
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So I sold a bunch of personal items via FB groups and on eBay so now Paypal issued me a 1099-K (over 200 transactions). The sales related to personal items I wanted to get rid of but also because I have a couple of hobbies for which I like buying items, using and then selling them away (camera lenses, board games, vases, etc).

- These are always used items and I sell them for a loss after using them.

- There is not way I can itemize each one with name, cost, sale value, etc since majority is done informally via facebook groups.

I understand I should not pay taxes on this - But what should I do about the 1099-K? I read conflicting advices.

a) Should I simply not report it (and keep file)? Won't it show a mismatch with the IRS?

b) Should I report it in a special way that allows for no taxes for the calculated? How to do so in TurboTax?

Thanks!

H

HelenC12

According to IRS 1099-K guidance, you should only report items that qualify as trade or business income.

If the items you sold were used in a trade or business or if you were selling items as part of a business (inventory), you will need to report them.
Based on your explanation, this is not income. You are just selling personal items as a loss. You don't need to enter the 1099-K in TurboTax.

If my assumption above about selling personal items at a loss is correct, you do not need to report this income on your return at all.

There is a chance that you will receive some correspondence from taxing authorities when you file your return without reporting this income.
Keep good records of the transactions and respond promptly to any correspondence you may receive from taxing authorities.

Sources: GiseleD and SusanY1

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